The Eight Habits Of Extremely Successful Entrepreneurs

Paul B. Brown
, ContributorI write on the best way to prepare for the future -- by creating it.Opinions expressed by Forbes Contributors are their own.

Great entrepreneurs don't write great books. In fact, they don't write many books at all.

Neither fact is surprising. Successful entrepreneurs are typically too busy innovating to write down much of anything. And on those rare occasions when they attempt to create a book, it’s filled with what they did, and not what led to their idea in the first place. As a rule, they are not particularly introspective.

So if we want to know what makes them successful—in order to improve our own companies whether we work for a huge one or our own start up—we need to study them. And that is exactly what I have been doing professionally for the last 30 years.

Here’s what I have found.

1. Look at How They Think, Not at What They Do. If you just observed the actions entrepreneurs take, you would conclude there isn’t that much to be gained from studying them. Each entrepreneur’s behavior is as idiosyncratic as they are. You would have to be Larry Page and Sergey Brin to start Google; Oprah Winfrey to found Harpo Productions.

But—and it is a huge but—if you look at how they reason, you see remarkable similarities. The process just about all of them follows in creating their companies looks like this. They:

A. Figure out what they really want to do.

B. Take a small step toward that goal.

C. Pause after taking that small step to see what they have learned.

D. Build off that learning and take another small step.

E. Pause after taking that step.

F. Build off what they learned in step two. And then take another small step…

If we were to reduce it to a formula, it would be Act. Learn. Build Repeat.

Put simply, in the face of an unknown future, entrepreneurs act. They deal with uncertainty not by trying to analyze it, or planning for every contingency, or predicting what the outcomes will be. Instead, they act, learn from what they find, and act again.

2. They Start with a Market Need. Ideas are easy—I bet you can come up with 10 new product or service ideas within five minutes right now, if you had to. And because new ideas are plentiful, they are not worth very much. As with anything else, if there is a glut—of ideas, in this case—the value goes down.

Besides, there is no guarantee anyone will buy the great idea you have come up with. If you start with the idea, you need to go in search of customers. If you begin with the need, you already have a market—the people who need what you have.

If you can discover a market need you can make a fortune. But intriguingly, that is not the primary motivation of the most successful entrepreneurs, and that brings us to the next point.

3. Don’t Set Out to Be Rich. The best entrepreneurs don’t have making a fortune as their goal, as they start off. Wealth is just (an extremely pleasant) byproduct.

Why not focus on gaining wealth? Well, if your primary objective is to get rich quick, you are bound to cut corners, short-change your customers, and fail to take the time to truly understand what the market needs. And that is true whether you are trying to get your company off the ground, or are introducing a new product or service in order to make this quarter’s numbers.

Instead, they identify the market need we talked about in point 2, and get to work.

4. Marketing. (Psst. Compete Differently) The conventional wisdom—find a niche; zig when others zag—is right, but not particularly helpful. It lacks, to be kind, specificity. Far better is to describe what the best entrepreneurs do and that is “compete differently.”

How do they do it? Here are some examples:

--Make small bets. Your resources are limited and starting anything new is risky. You don't want to compound those risks by betting everything on one role of the dice.

--Make those small bets quickly. No, you don't want to lose money. But, since you are not risking much, you can afford to fail. Get out in the marketplace fast and let potential customers tell you if you are onto something. Action trumps everything—especially planning.

--Where do you place those small bets?(I)Obviously, in areas where competitors don't exist, or are weak. Not so obviously, in places where you feel strong. That confidence will help you overcome the inevitable hurdles you will face.

--Where do you place those small bets? (II)No customer wants to be entirely dependent on just one supplier, no matter who it is. Ask yourself, what your competitor's customers want. Better yet, ask those customers yourself.

--Let the market define you. People will tell you what they like, and what they don't, about your product. Incorporate their ideas with yours. Making the world's best videocassette recorder does you no good, if what people really want are DVRs.

--One step at a time.Be satisfied with making one significant improvement in a product or service. You're bound to make mistakes just attempting one thing—many more if you try to do too much.

--Keep looking for places...where you have a genuine competitive edge. That's where profitability and security lie. Tempting as it may be, don't try to buy your way into markets where you offer the same product at a lower price. That's where you'll be vulnerable.